Tandon Plans to End Most Domestic Sales : Electronics: The Moorpark personal-computer maker will shift focus to Europe, and the change has already resulted in layoffs.

Tandon Corp. says it plans to end most of its U.S. operations and focus on selling its personal computers in Europe, a shift that so far has forced the layoff of 125 American workers.

The realignment is the latest effort by Moorpark-based Tandon to stanch huge losses in recent years, which have been exacerbated by an intense price war in the personal-computer (PC) industry.

Tandon, which has been selling about 80% of its products in Europe and 20% in the United States, lost $18.3 million in the first half of 1992 on a 17% drop in sales, to $201 million. That followed a $48-million loss, on sales of $461.4 million, in 1991.

The PC price war has further eroded Tandon’s profit margins and drained its cash reserves. As of June 30, the company’s cash on hand totaled $13.5 million, down from $57.6 million at the end of 1990. That’s forcing Tandon to cut its costs.

The company’s strategic shift includes:

* Ending sales through U. S. mass merchandisers, namely through office-supplies warehouses such as Sam’s Club, a unit of Wal-Mart Stores Inc. Tandon, which began selling through those channels only a year ago, said there had been “unexpected cancellation of sales relationships with major warehouse club accounts.”

One of those accounts was Sam’s Club, said Tandon spokesman Mike Sanders. Some of Tandon’s biggest rivals, such as Packard Bell Electronics in Chatsworth, also sell to such discount chains.

* Scaling back all of its U.S. operations, such as marketing and sales, and shifting those duties to Europe. However, Tandon’s computers will still be available in the United States via Tandon’s direct-sales unit, PC Brand.

* Reducing its in-house manufacturing operations, including the phase-out of its Vienna, Austria, production plant, and instead hiring lower-cost outside contractors in Asia and Europe to build the equipment to Tandon’s specifications.

Tandon specializes in so-called IBM compatible computers, that is, ones that can operate software designed for International Business Machines Corp.’s PCs, and it tries to sell its machines at relatively low prices to gain market share. But the price war has reduced the company’s competitive edge.

Sanders indicated more job cuts loom as Tandon scales back its in-house operations. “Certainly there will be less requirement for some of the manufacturing functions we have,” he said. As of mid-August, Tandon employed about 1,350 people worldwide.

Tandon’s stock, which climbed as high as $4.50 a share during 1991, closed Monday at 75 cents a share on the NASDAQ market.